Tom Perez foiled, we hope

We have written about the lengths to which Tom Perez, President Obama’s nominee for Secretary of Labor, went to induce the City of St. Paul into withdrawing its appeal of a fair housing lawsuit that raised the viability of claims based on disparate impact. In exchange for dropping its case, the U.S. government, spurred by Perez, agreed not to intervene in an unrelated False Claims Act case that had the potential to return more than $180 million in damages to the U.S. treasury.

Under “disparate impact” analysis, plaintiffs are allowed to prove a prima facie case of discrimination by showing that a neutral practice weighs disproportionately on a protected group, e.g., African-Americans. The defendant must then justify using that neutral practice under a fairly stringent standard. Perez and others correctly view this theory as critical, in general, to success in housing discrimination suits.

But yesterday, the Supreme Court granted certiorari in (i.e., decided to hear) another case that raises the same issue as the St. Paul case did. That case is Township of Mt. Holly v. Mt. Holly Gardens Citizens in Action.

Does this mean that Perez’s deal with St. Paul was for naught? Probably, but not necessarily.

The administration used the time it gained through Perez’s deal to issue regulations endorsing the disparate impact theory in housing discrimination cases. But self-serving regulations thrown together to preserve a dubious pet litigation theory are unlikely to receive any meaningful deference from the Supreme Court.

A strong statement of the argument against applying disparate impact analysis in housing discrimination cases can be found in this amicus brief filed in the St. Paul case by the Pacific Legal Foundation, the Center for Equal Opportunity, the Competitive Enterprise Institute and the Cato Institute.